Buying A Gas Station For Sale - Some
Things To Consider
If you are thinking of buying a gas station for sale in the Greater Toronto Area or in
southern Ontario, Canada there are a few things you should think about before you make the purchase. Buying a
service station can be a bit more complex than many other types of issues due to environmental or franchise
variables. They can also be a great investment if structured properly.
Demand for gas station businesses is high
These are one of the most popular
businesses that people generally inquire about. They are (relatively) easy to operate and can be a good investment
for the right owner. The demand for gas stations will remain high - even if the price of oil continues to
fluctuate. If there is a major shift to "green" energy in the future people will still require local and accessible
centres to fuel their vehicles.
Make sure it is a fair comparison
If you are in the market for a gas station for
sale please ensure that you make fair comparisons. It is important to compare "apples to apples". The selling
prices of gas stations (and profitability) can vary widely so take a close examination of all the facts.
Ask important questions like:
- Are the premises leased or owned?
- What other
factors are influencing the price or profitability: convenience store, car wash, café, etc.
A gas station can be a great investment but please be sure to make sure your comparisons are on
What to Look for in a Gas Station for Sale
Location. Traffic & accessibility are the keys here. An ideal situation may be access
off of a major highway with little or no competition. A busy street with good access from several directions is
also highly desirable.
Convenience Store. A large convenience store will attract traffic. The bigger the
better, in fact. Generally, all things being equal - a service station with a large convenience store will attract
more customers than a similar one that has a small convenience store.
"Curb Appeal". What shape is the gas station for sale in? Is it clean? Is it
attractive and welcoming or is it run down, dirty and needing of some significant TLC? This is important. A gas
station that is clean and welcoming will attract more traffic.
Neighbourhood. If crime is a concern for you (and it should be) some neighbourhoods
are more prone to crime than others. Gas businesses can be targets for criminals so choose your location
Some Issues to Consider
Environmental Issues. Consult with an expert regarding the environmental issues surrounding
a gas station business for sale. You may encounter issues such as contamination, tank lining and remediation. If
there is an environmental issue to contend with you will want to know before you buy the business. Clean-ups can
cost into the thousands of dollars. Investigate if there is any pending or past law suits or actions taken as a
result of environmental issues. The new owner of a gas station may be held liable.
Road Construction. Check with the city to see if there is any major road work
planned for the street that the gas station is on. Road construction can cause serious financial issues for a gas
station business if it prevents customers from coming to you.
Franchise or Independent? If you buy a franchised gas business under the flag of one
of the major companies then you typically will buy gas from them. Independent gas stations are not necessarily held
to one supply source but they can sign agreements with distributors to get pricing breaks on gasoline
Buying a filling station business for sale can be a great investment. It is important to also
remember that buying a gas station is not necessarily a "hands off" investment - contrary to what some people may
think. It involves a lot of hands-on work to make it a success. A gas service station business is like most other
small businesses in that books needs to be kept, employees need to be managed and proper planning must be in place
to make it a success.
It is very important to do thorough investigation and to consult with legal, accounting and
environmental experts before you make the purchase.
We are an Ontario-based business broker, serving the market from Toronto to Hamilton. If you are
considering buying a gas station for sale or any other type of business for sale Toronto and have questions, we can assist you through the process.
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